Captive Insurer Sues Reinsurer Over Transfer of Reinsurance Obligations

DETROIT — An insurer has sued a captive insurer in federal court, accusing it of breaching a healthcare reinsurance agreement by failing to pay claims arising from an underlying lawsuit arising from an alleged outbreak of Legionnaires Disease at a Michigan hospital.

In a Jan. 8 complaint filed in the U.S. District Court for the Eastern District of Michigan, McLaren Insurance Co. (MICoL) says Hiscox Agency Ltd. assigned, sold and/or transferred its duties under the reinsurance agreement without the insurer’s knowledge or consent.

MICoL, a Cayman Island-domiciled insurer, is a subsidiary of Michigan-based McLaren Healthcare Corp. From Oct. …